Last week, the global brewer announced plans to brew Foster’s with a reduced ABV in line with shifting consumer habits and to benefit from the lower threshold for duty.
The beer is currently brewed at 3.7% ABV but will be reduced to 3.4% ABV from February next year.
Following the news, Rice told The Morning Advertiser (The MA) Heineken was committed to ensuring prices for on-trade customers remained fair in light of the duty savings from the lower strength.
Strong seller
“We want to continue supporting our customers”, he said. “Foster’s is a really strong seller for us.”
“We are going to invest in Foster’s, that’s a really important message to our customers. We see it as a real strength in our portfolio and it resonates well with consumers. It’s a fantastic product.
“Could we be more competitive on our pricing? Yes, I think we could... because there is that duty cliff.
“We will definitely be more competitive with our pricing.”
While the duty savings were an important factor behind the decision, Rice told The MA quality, consistency and value were also key.
He continued: “It’s still got the same, great, crisp, dry taste profile. Consumers want low ABV products and it’s taking units out of the market, but you’ve got to have a great product and that’s what we’re confident in.
Good value
“You can’t and shouldn’t ever make a product just because of duty. You do it because you think it’s what consumers want, it’s the right proposition and it offers good value.”
In January this year, Heineken, which operates some 2,400 sites under its Star Pubs arm, also reduced the ABV of Sol to 3.4% ABV. At the same time, it announced a 2.97% price hike for its draught products in pubs.
Earlier this week, Rice also told The MA Heineken hoped the Government would recognise the role of pubs and hospitality in society ahead of the Autumn Budget.
He said: “It’s the place where people celebrate, commiserate, it’s where people want to go and we need to ensure that the pub remains at heart of the community and that means freezing beer and cider duty, it means structural business rates reform and it means supporting the industry.”
